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Asian Development Outlook 2019

Topics Covered:

  1. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

 

Asian Development Outlook 2019

 

What to study?

  • For Prelims: About ADB and key findings in the report.
  • For Mains: India’s position- concerns, reasons and reforms needed.

 

Context: ADB publishes Asian Development Outlook 2019.

 

Key findings:

  • Growth in developing Asia is projected to soften to 5.7% in 2019 and 5.6% in 2020. Excluding Asia’s high-income newly industrialized economies, growth is expected to slip from 6.4% in 2018 to 6.2% in 2019 and 6.1% in 2020.
  • Since oil prices rose and Asian currencies depreciated, inflation edged up last year but remained low by historical standards. In light of stable commodity prices, inflation is anticipated to remain subdued at 2.5% in both 2019 and 2020.
  • Only 20 of 45 individual economies are projected to see growth accelerate in 2019.
  • By sub-region, aggregate growth rates in Central Asia, East Asia, and Southeast Asia are expected to decelerate, while South Asia and the Pacific will bounce back from slowdown in 2018.
  • In East Asian economy growth in East Asia decelerated by 0.2% to 6.0% in 2018, weighed down by weakening external trade and moderating investment in the People’s Republic of China (PRC) but sustained by resilient domestic consumption.

 

India’s position:

  • Growth rate: India’s growth forecast is cut to 7.2% for 2019-20 because of a slower-than-expected pickup in investment demand. The growth rate in Financial Year 2020-21 is likely to be 7.3%.
  • Recovery may be due to– agriculture and stronger domestic demand, improved health of banks and corporations and implementation of a value-added tax.
  • The inflation is expected to average around 4% in the first half of FY2019, and therefore the Reserve Bank would have some room for lowering policy rates further increasing credit.

 

About ADB:

The Asian Development Bank was conceived in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world.

  • It assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development.
  • Established on 19 December 1966.
  • Headquartered — Manila, Philippines.
  • Official United Nations Observer.

 

Voting rights:

  • It is modelled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions.
  • Japan > United States > China > India >Australia

Sources: the hindu.

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